Do Broadcasters Really Get the Net?

NEW YORK (03/16/2000) - When Martha Stewart spent fifteen minutes showing slides of her prize chickens rather than talking about the convergence of television and the Internet, you could hear the grumbling among the crowd of spiffily dressed TV executives.

True, the diva of homemaker how-to is a poster child for early success in bridging the Net and television. Her wildly successful site is the hub of her stable of broadcast and print media properties.

And in her entire media mix, "my biggest bet is on the Net," Stewart said.

Most attendees at the When Networks Collide conference, held here by the National Academy of Television Arts and Sciences on Wednesday, agreed with Stewart on that point. And they shared a vision of a boundless cornucopia of broadcasts, automatically filtered for you by smart TVs and PCs.

But, like Stewart, they were very short on concrete details on how this happy scenario will arrive. And their industry has precious few bragging rights so far.

TV Dips a Toe

The TV networks' early Net moves have been clumsy, admitted Eric Haseltine, senior vice president of research and development for Walt Disney Imagineering.

Instead of shouting the answers out loud at your TV while Who Wants to Be a Millionaire or Jeopardy is on, you can guess the right answer online. And companies such as ACTV HyperTV Networks are offering tools that will let TV shows do much more; you'll be able to chat and learn more about your favorite show while it's on.

But these are baby steps. "We can do a lot better, and we will," said Peg Murphy, vice president of business development at NBC Interactive Media.

She believes NBC and its peers must deliver better viewer value, cater to niche audiences, and personalize the experience of the viewer. However, she said, the road toward this is unclear.

Broadcasting's Blue Sky

The industry does have a blue-sky vision of its future: Smart devices that know your preferences will troll the Net for a mammoth universe of video programming, select content, and save it on gigantic hard drives. Then on Sunday night, you just sit down and select the best of the best.

"There is going to be so much video out there, people are going to start limiting their video consumption the same way they watch how many calories they eat," said Josh Harris, chair of Pseudo Programs, whose Pseudo Online Network site shows first-run videos online.

With so much content, Harris said we will all have our favorite video DJs feeding us recommendations.

Even more importantly, you'll gain control of what's on TV. "The boob-tube will die in the twenty-first century," replaced by these smart devices that act on your behalf, declared Stacy Jolna, vice president of programming and media partnerships for TiVo.

With an eye on that personalization trend, more and more content producers are focusing on niche programming accessible over the Net. People will be happy to trade broadcast-quality programming for content that speaks to them, Jolna said. pulled the curtains back on an early example of this: a video clip library expected to launch this month and specializing in everything from extreme sports to fashion.

Other personalization schemes will track your viewing habits and change video content based on your channel surfing history. This will allow TV networks to deliver content and commercials tailored to you. (Sound familiar?) Interacting with the TV will change too. Sporting events will allow you to virtually participate in, for example, a golf tournament with Tiger Woods. As the game is being played on TV, you'll play along at home via a next-generation game console.

Net Barbarians at the Gates

There remains the little problem of how the TV industry will profit from this starry-eyed spectacle--and what happens to the estimated $25 to $30 billion spent on TV advertising in the United States each year.

TV giants will compete with a vast new array of competitors--everyone from AOL Time Warner and Microsoft down to personal Webcasters. "Now anyone with the right equipment can compete with television networks," said Shelly Palmer, founder of, a Web site dedicated to teenage girls. And new variants of programming are emerging; high-speed Internet access already fuels the delivery of Net video talk shows, cartoons, short films, and personalized newscasts.

Moreover, the advertising dollars that fund all this may be at risk. The personal digital video recorders that will give viewers all those choices, already offered by companies such as TiVo and ReplayTV, make skipping advertising as easy as channel surfing.

As ad revenues decline, networks will be forced to rely on product placement and sponsorships to pay the bills, said Allen Thygessen, executive vice president of business and sales for Wink, a company that specializes in delivering interactive ads. TV shows will look like a NASCAR race with corporate logos plastered in backdrops.

Meet the New Boss, Same as the Old Boss?

Some believe, though, that the TV industry not only will endure, it will prevail.

"Where the Internet is going is not where it's been," said Robert Lessin, chair and co-chief executive officer of Wit Capital. As the television industry morphs to become a new-media beast, he said, the "carnage will be massive."

But most of the roadkill will be dot-coms, Lessin maintained.

"What will remain online are brick-and-mortar brands," he declared. "We have the eyeballs, the eardrums, and the great content. Someone might have the best content on the planet, but if no one knows where to find it, then what does it matter?"

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